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Medical Gap Plans - Reduce Health Plan Costs

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Medical Gap Plans - Reduce Health Plan Costs

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Medical Gap Insurance reduces the costs of health insurance. Health Insurance costs contine to rise ans this is one of the best solutions that Insurance Brokers can show their clients and prospects. Medical gap plans can be for insured or self funded medical plans. These are not just voluntary plans any longer.

Medical Gap Insurance reduces the costs of health insurance. Health Insurance costs contine to rise ans this is one of the best solutions that Insurance Brokers can show their clients and prospects. Medical gap plans can be for insured or self funded medical plans. These are not just voluntary plans any longer.

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Medical Gap Plans - Reduce Health Plan Costs

  1. 1. voluntarybenefitprograms.com Medical Gap Strategy Creative Health Plans Cost Reduction
  2. 2. voluntarybenefitprograms.com Executive Summary: Medical Gap Plan Allows employers to reduce group health plan costs 10% to 20% This also helps people guard against large out-of-pocket medical expenses. 1)Reduce plan costs 2)Improve benefits
  3. 3. voluntarybenefitprograms.com Health Plan Costs = Big Problem
  4. 4. voluntarybenefitprograms.com Worker premium share up 159% in 10 years... ...Not Sustainable!
  5. 5. voluntarybenefitprograms.com Growing need for Supplemental Medical insurance A 2007 study* found that the majority of personal bankruptcies are due to medical expenses, even for those with healthcare coverage. 36% of adult Americans have no savings earmarked for emergencies, according to the Consumer Federation of America. 76% of Americans are living paycheck-to- paycheck, according to CNN Money. *Medical Bankruptcy in the United States, American Journal of Medicine, 2007 Employees Need Protection
  6. 6. voluntarybenefitprograms.com Addressing Needs  There is increased interest in supplemental medical and hospital indemnity products at the workplace, as employers continue efforts to control health plan costs.  The benefit may be offered employer-paid, or employee-funded (voluntary), or a combination of the two.  Coverage is offered on a guarantee issue basis with no medical underwriting needed. Dependent coverage is available.
  7. 7. voluntarybenefitprograms.com A 2011 survey indicated that more than 50% of employees say they are concerned about costs NOT covered by medical insurance*. *Met Life study of employee benefit trends 2011 Addressing Concerns
  8. 8. voluntarybenefitprograms.com Over a third of employees say that supplemental benefits are a reason to stay with or join an employer* *Met Life study of employee benefit trends 2013 Satisfying Employees
  9. 9. voluntarybenefitprograms.com Main Points Gap plan Savings Opportunity: Create savings from health plan changes Gross savings can be 15% to 30% (by moving to largest out of pocket options)
  10. 10. voluntarybenefitprograms.com ———Supplemental Medical Expense(Gap Plan): • Provides employer solution TO SAVE MONEY $$$ • Enables people to fill medical gaps...protects finances • Gives brokers a creative solution to reduce costs
  11. 11. voluntarybenefitprograms.com The Gap Medical Strategy uses an employer sponsored supplemental insurance plan paired with a high deductible health plan. Instead of giving the medical carrier 100% of premium... Give the medical carrier 75% and gap carrier the balance This can reduce the overall cost of group medical...
  12. 12. voluntarybenefitprograms.com Fill in plan changes with an insured medical gap plan (so employees are not hurt by plan changes) Employers will pay for this if the numbers work Next
  13. 13. voluntarybenefitprograms.com Sample Out Patient Benefits Pays a first dollar benefit for outpatient expenses incurred up to plan maximum Examples of expenses covered:  Surgery in a facility or a doctor’s office  Emergency Room – Accident or Sickness  X-ray, Lab, Diagnostic Testing, MRI  Outpatient Radiation/Chemotherapy  Specialist Visits  Physical Therapy, Chiropractic, Rehab
  14. 14. voluntarybenefitprograms.com Sample In-Patient Benefits Pays a first dollar benefit for inpatient out of pocket expenses incurred up to the plan maximum Examples of covered expenses:  In-Patient Surgeries and Hospital charges  Physician In-Hospital charges  X-ray, Lab, Diagnostic Testing, MRI’s
  15. 15. voluntarybenefitprograms.com Example - Employer advantage Renewal Plan: $500 Deductible 80/20 Coinsurance $3,000 Out of pocket max #of lives Mo. Cost EE only 30 $675 EE + SP 7 $1,350 EE + Ch 5 $1,170 Family 8 $1,890 Monthly Premium $50,670 Proposed Plan: $2,500 Deductible 80/20 Coinsurance $5,000 Out of pocket max #of lives Mo. Cost EE only 30 $450 EE + SP 7 $900 EE + Ch 5 $810 Family 8 $1,350 Monthly Premium $34,650 Total Savings: $16,020 monthly! ($192,240 annually)
  16. 16. voluntarybenefitprograms.com Gap Insurance Claim Example  The following is an example of how our Gap plan works. The example is based on a $2,500 deductible medical plan, with 20% coinsurance, and a maximum out-of-pocket limit of $5,000.  The example is an in-network hospitalization claim for a covered surgery, with an in-patient plan benefit of $5,000.
  17. 17. voluntarybenefitprograms.com $15,000 Hospital & Surgery Claim (Employee advantage) Without GAP With GAP In-Patient Benefit In-Patient Benefit Deductible: $2,500 Deductible: $2,500 Co-Insurance (20%): $2,500 Co-Insurance (20%): $2,500 Max Out-of-Pocket: $5,000 Max Out-of-Pocket: $5,000 In-Patient Gap Benefit: $0 In-Patient Gap Benefit: $5,000 Insured’s Out-of-Pocket:$5,000 Insured’s Out-of-Pocket: $0
  18. 18. voluntarybenefitprograms.com The Supplemental Medical Expense plan (Gap plan) is an insurance product which reimburses certain out-of-pocket medical expenses to protect employees. It is paired with a lower cost major medical plan, and works most effectively with high-deductible plans. The combination allows the employer to find savings and keep employees whole. Coverage offered on a guarantee issue basis with no medical underwriting. Dependents are covered as well. Medical Gap Coverage
  19. 19. voluntarybenefitprograms.com Gap premium NOT counted for Cadillac tax This reduces any potential penalty - (IF properly structured) The initial annual threshold amounts for the tax are: –$10,200 for self-only coverage –$27,500 for coverage other than self-only Family limit example with 8% premium growth: 2016 $27,210 2017 $29,387 (maximum ceiling of $27,500 exceeded) 2018 $31,737 (over the limit by $4,237) $4,237 of “compensation” subject to 40% excise tax. Total tax paid: $1,695...per family! Bonus for Forward Thinkers
  20. 20. voluntarybenefitprograms.com Safe for Employer Saves Premium ACA Compliant HRA Replacement May Reduce Cadillac Tax Insured Plans or Self Insured
  21. 21. voluntarybenefitprograms.com Make us your resource for gap plans We help you bring clients in a new programs:  We deliver tangible savings  We help you bring innovative solutions  We help you cross sell additional benefits
  22. 22. voluntarybenefitprograms.com Next…  We are a Managing General Agency for the top Medical Gap programs, providing analysis and turnkey solutions with pricing & benefits.  Add us to your team & let us help you with win - win  Gap plans DO NOT require waiting for an annual medical renewal.
  23. 23. voluntarybenefitprograms.com Why…  The trend for health plan costs is up.  Our cost savings solutions for groups help you win  We provide you with the top carrier comparisons & U/W  We also help you plan enrollment & communication  Don’t rely on single carrier solutions and risk your business….
  24. 24. voluntarybenefitprograms.com Service… We do the heavy lifting:  We put the programs together  Provide options & value added programs  Create an enrollment strategy  Carrier comparisons
  25. 25. voluntarybenefitprograms.com  We bring you new ideas that most group brokers are not using  We Seamlessly become part of your team and and work behind the scenes on your behalf. Your Turnkey Solution... *Next step: Contact us for a strategy call
  26. 26. Contact: Peter Toth Peter@voluntarybenefitprograms.com www.VoluntaryBenefitPrograms.com 1-800-579-7731

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